Soybean Futures Drop Following Jobs Report — Daily Grain Highlights

By Kirk Maltais

--Soybeans for November delivery fell 1.9% to $10.04 1/4 a bushel on the Chicago Board of Trade on Friday, turning lower as wider markets had a mixed reaction to the better-than-expected jobs report.

--Wheat for December delivery fell 1.4% to $5.66 1/2 a bushel.

--Corn for December delivery fell 1.1% to $4.06 1/4 a bushel.

HIGHLIGHTS

Stubborn Uncertainty: The U.S. jobs report provided little clarity for traders hoping for better information on what's more likely for the Federal Reserve this month, a quarter-point or a half-point rate decrease. "The jobs report put a damper on the grain rally as recession fears and stagflation fears are causing traders to take off risk," Phil Flynn of Price Futures Group said.

Making a Pivot: Soybeans started higher, but soon collapsed in morning trading. The most-active contract may have hit a short-term high, sparking a reaction from algorithmic traders, Total Farm Marketing's Naomi Blohm said in a note. "That seemed to be the technical target for day traders, and then profit taking kicked in, which led to more profit taking and sell stops getting triggered under the market," Blohm said.

INSIGHT

Wanting More: Grain traders did some positioning ahead of next week's WASDE report from the USDA--holding out hopes that the agency will raise its outlook for export demand for U.S. grains, at least partially offsetting the bumper crop expected out of the Corn Belt this fall. "Traders have factored in the probability that the USDA will raise their estimate for corn export by approximately 50 million bushels and will likely bump their corn used for ethanol estimate by 15 to 20 million bushels," said Tomm Pfitzenmaier of Summit Commodity Brokerage in a note.

Looking South: With grain harvesting starting this month traders are slowly shifting their focus from Corn Belt weather and the strength of the U.S. crop to Brazil, where growers are ramping-up the planting of their first yearly crops of soybeans and corn. "The complete absence of water in Central/Northern Brazil grabs more attention after the next 2-3 weeks," AgResource said.

Global Food Prices Drop: Food prices fell slightly in August as lower prices for sugar, meat and cereals offset higher gains for vegetable-oil and dairy-product, the Food and Agriculture Organization of the United Nations said. The FAO's food price index, which tracks global prices for a basket of staple foods, averaged 120.7 points in August, marginally below July's revised level and down 1.1% on the year. Cereal prices fell 0.5%, reflecting a decrease in global wheat export prices on competitively priced Black Sea wheat goods, and greater-than-expected harvests in Argentina and the U.S. But world corn prices rose, reflecting heatwaves in parts of Europe and North America.

AHEAD

--The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.

--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Monday.

--The USDA will release its weekly Crop Progress report at 4 p.m. ET Monday.

Joseph Hoppe contributed to this article.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

September 06, 2024 16:04 ET (20:04 GMT)

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